Given the indisputable advantages of radio frequency identification (RFID), why aren’t many more Canadian firms warming up to this technology?

One probable obstancle has to do with “privacy concerns” – misgivings that RFID could compromise customers’ confidential information, and fear of the legal and other consequences, if that happens.

Is this mere paranoia?

Leading evangelists for the technology do not think so.

Privacy matters

Many of those spearheading RFID adoption are very clear that concerns about privacy are absolutely valid and should be fully addressed.

One of these is Ron Bone, senior vice-president of distribution and support, at San Francisco based healthcare services firm McKesson Corp.

Bone – whose responsibilities at McKesson include patient safety and the security of the supply chain – says addressing privacy and security issues are particularly vital in the early stages of an RFID implementation.

“[False] steps at this stage can be disastrous,” said Bone, citing happenings at a U.S-based school a couple of years ago.

He recalled the unfortunate consequences when Brittan Elementary School in Sutter, Calif. – without consulting parents or guardians – required students to wear radio frequency identification badges capable of tracking their every move.

This sparked a furor among a section of the parents who dubbed it a violation of their children’s privacy. The issue shot into the national spotlight, and advocacy organizations including the American Civil Liberties Union got involved.

To avoid mishaps such as these, Bone said the implications and impact of any RFID project should be carefully reviewed, and affected groups made aware, prior to the roll out.

And this, he said, is what EPCglobal seeks to do through its “public policy” steering committee. A subsidiary of the global non-profit standards organization GS1, EPCglobal Inc. supports the adoption of RFID in today’s trading networks.

Educating Rita (and other consumers)

The committee, Bone said, addresses issues such as “consumer notice” as well as consumer – and employee – education.

“We recently did a survey of people who could potentially receive drugs in packs with have RFID tags.”

EPCglobal has also prepared a media kit that addresses some of the common questions and concerns about RFID. One common consumer concern, of course, is that RFID tags may enable other people to identify them and the products they buy.

Bone believes it’s important to spread awareness that information on RFID tags is impersonal, much like license plate information, with no identifiable data on the person.

“Essentially, the data on tag is set of numbers with pointers on where to find additional information.”

The actual information, he said, resides in “databases that are thoroughly secured by the manufacturers and retailers.”

EPCglobal has issued guidelines on RFID technology use for consumer products that includes requirements for Consumer Notice.

This simply means potential buyers are given clear notice of the presence of RFID-enabled tags on their products or packaging. This notice, the guidelines say, should be provided “through the use of an EPC logo or identifier on the products or packaging.”

“The idea is retailers should not hide the fact that they are using RFID, and the reasons for the use of this technology,” said Bone.

Consumers should also know are free to discard the tag after they purchase the product. (It’s expected that for most products, the EPC tags will be part of disposable packaging, or otherwise capable of being discarded).

In line with its consumer awareness initiatives EPCglobal has launched a Web site which – in addition to information on RFID (its history, evolution etc) – features case studies on it’s successful used in fields from health care to travel, and for tasks ranging from ensuring food quality to optimizing leisure.

Anti-Counterfeiting

The crucial role RFID can play in countering counterfeit products was described by another EPC executive Patrick Javick, manager of industry development, EPC Global, North America.

Essentially EP is an electronic record of an item’s “chain of custody.”. The term is often used in the context of pharmaceutical products. The U.S. Food and Drug Adminstration’s goal to have movement of these products in the supply chain documented – from point of manufacture right up to final dispensation.

On January 5, 2007, EPCglobal ratified version 1.0 of an E-Pedigree Standard.

Javic said item level electronic pedigrees can significantly reduce shrinkage and deter counterfeiting, which contrary to a common belief is not restricted to high-value items.

Industry observers, such as Mark Roberti founder and editor, RFID Journal, say RFID can serve as an antidote to a problem that that is getting pervasive. RFID Journal is a publication dedicated to the applications of RFID technology.

Roberti recalls how a couple of years ago, Proctor & Gamble discovered bottles of counterfeit Pantene shampoo a few miles away from the company’s Cincinnati headquarters.

The growth of counterfeiting has been extensively tracked by DNA Technologies, a security company that uses DNA-based tracking technology to combat counterfeiting, piracy and product diversion.

The firm’s report titled, “The 21st Century Solution to Counterfeiting, Forgery & Diversion” estimates that in the U.S. alone counterfeiting eliminates more than 750,000 jobs, and costs businesses more than $200 billion in revenues every year.

The commonest abuse, it says, is counterfeiting at the item level, for example, brand-name apparel, electronics and pharmaceutical products.

Electronic pedigree – that uses RFID technology – is a great way to counter item-level counterfeiting, Javic said.

It involves an electronic security marker (a unique data code) on the product — that either by itself or in conjunction with a network, distinguishes the product as genuine.

The embedded marker is automatically read as the item passes through the supply chain either by itself or along with other items, in a shipping case, for instance.

Electronic pedigree, said Javic, records of a chain of custody.

“As product moves to a new level in the supply chain, additional information is layered on that tells you who owns the product, where it is going and so on.”

Counterfeiters would find it near impossible to circumvent the pedigree, which would contain product, transaction, distributor and recipient information – along with signatures.

Bone said EPC Global is working on a revised EP standard that would add greater efficiencies to the process.

He said, while you do not strictly need an RFID tag to create EPs (as the current standard supports serialized bar codes) using RFID has definite benefits as it provides non line of site scanning.

“The ability for us to look at inbound product efficiently using RFID definitely keeps up the momentum in supply chain.”